Are you giving away your business by paying high commission fees to your groomers and pet stylists?
Been there. Done that. It’s not fun. In fact, it’s downright frustrating!
Years ago I was at the customary 50/50 split with my mobile fleet groomers and stylists. I groomed right beside my entire team in a van. I worked for the same wages, 50% commission of the grooming, just like everyone else. We did charge a separate “house call” charge per stop but that went to the company, not to the groomer.
I had six vans on the road. We were busy. Really busy!
Then my hands started to give me issues. I was forced to stop grooming for a while as they healed. As the business owner. I thought it would be easy to continue to pull a paycheck even though I wasn’t grooming. That’s when I learned how WRONG I was…
After payroll was met, bills paid, and taxes covered, we were only clearing about 1-2%. I didn’t even have an emergency fund if anything went wrong… anything from new tires to new transmissions, or a brake job on any of the vans. If we ran into any bumps in the road, I was close to being sunk. Was there any hope of me pulling a “salary” as the owner? Not a chance. Once we juggled all the bills, there just wasn’t any money left over.
During that time period, I learned quickly how to read a financial statement. Before then, I was racing so hard grooming, maintaining vans, and guiding my staff on proper pet grooming, I didn’t find the time to read my monthly Profit & Loss Statement (or even understand it!). I quickly learned how important that knowledge was! Bottom line: my fleet of vans and groomers provided amazing grooming services. My entire team was earning nice wages. But all I was doing was creating a job for myself… plus I was producing a lot of stress and aggravation for myself.
Ultimately, it was easier for me to shut down my mobile business so I could focus on other industry opportunities. As a business owner, you have a right to earn more than your staff. You’re carrying the weight of the business on your shoulders. All the responsibility. You assume all of the risk. You bear the headaches and the frustrations. Being able to make a fair profit is a part of any business owners’ dream.
My guess is many of you are struggling with a similar situation. Guess what? There is a solution to this problem – and we’ll get to that in a minute.
Fast forward to 2007. I opened Whiskers Resort & Pet Spa. I was determined to do a better job with the grooming department there than I had done years earlier with my mobile fleet. This time I opted to go the hourly route for my grooming team. On paper, the numbers worked. In reality, it was a mental and moral nightmare. Holding artistic pet stylists accountable was like wrestling a greased pig. It just wasn’t working! EVERYONE complained about EVERYTHING.
If this grooming department was to survive and thrive, I had to figure out a different way to pay my grooming team.
I looked to other industries to get my inspiration. The beauty industry held the key.
The system I chose automatically sets up ways to promote, reward, and motivate our team. It uses a combination of commission based earning along with hourly wages for bathers. Groomers and stylists are paid commissions on full groom pets ranging from 38% to 48% based on their ability to meet quotas. We have six Tiers altogether with 2% increment jumps between Tiers. Bathers are paid hourly between $8.50 and $12.00 per hour.
Groomers and stylists have daily, monthly, and quarterly goal requirements. We track and measure the number of:
- New clients
- Repeat clients
- Pre-booked appointments
- Pets groomed per day
- Sales revenue
Groomers and stylists can Tier jump if they maintain the goals and targets consistently for three months. They can also be demoted a Tier if they do not maintain their quotas. Plus, for any stylist to go beyond a Tier 3 on our team, they need to be a Certified Master Groomer by one of the three voluntary testing organizations in the United States:
Becoming a Certified Feline Groomer with the National Cat Groomers Institute of America (NCGIA) or any of the first aid organizations is a bonus.
Our team is also paid a 10% commission for add-on services like teeth brushing and spa upgrades.
All of our groomers and stylists can request a bather to assist them. However, if they choose to have an assistant bathe and prep their dogs, they pay half of their hourly wages. This keeps EVERYONE on their toes and accountable.
In order for the system to work well, the secret is not in the commission levels. It’s in the average price per pet. At Whiskers Pet Spa, the average ticket price per groomed pet runs between $65 and $70.
We have been working with the system for over five years. Along the way we have made modifications and adjustments to meet our needs. It’s been working brilliantly.
I’m a strong advocate of hiring employees NOT subcontractors or renting table space. I like the control it gives and benefits I can offer to my staff. I never have to worry if the government is going to come beat down my door for improper hiring practices. I sleep easier at night. I have no problem paying my company’s taxes. It’s a privilege to live in this country – to pay my fair share of the taxes.
However, if you are going to play Uncle Sam’s game, you need to play by the rules. You are going to have to come up with between 13% and 15% extra to cover payroll taxes. Those obligations are:
- Social Security
- Unemployment Taxes
- Workers Compensation
If you are paying 50% or 60% commission rates to your groomers – you need to tack on the payroll taxes, too. So your commissions are more like 63% – 75%. Ouch!! That just doesn’t leave you much room to run your business OR turn a profit.
If you are struggling with your payroll or running a profitable grooming business, I urge you to review your financial statements. If you struggle with understanding them, get help. The financial numbers do not lie. They are the barometer of your business.
Remember, you didn’t go into business to lose money. You have every right to earn a fair living – just as your staff has the right to fair wages.
Most successful pet grooming businesses charge a higher price for their services. In turn, they can reduce the commission levels while still allowing their groomers and stylist the opportunity to earn a healthy wage.
Last year our full-time stylists annually earned between $28,000 and $54,000 including vacation time. And that doesn’t even include tips! Rarely do we have anyone complaining about too much work or refusing to do more dogs when we are busy.
This system has really helped us promote, reward, and motivate our grooming department almost automatically. Our groomers earn a healthy wage. We can easily pay all our bills. The department is profitable. We all sleep well at night.
To learn more about how to run the financial side of your business, check out two of our videos on Learn2GroomDogs.com. You’ll see me having discussions with my accountant and financial guru in ways that are helpful and easy to understand. Click here!
What do you think? How is your structure different? Jump over to the Learn2GroomDogs Facebook page and tell us about it.